Council Deputy Leader sets record straight on budget position

Deputy Leader Councillor Simon Spencer has set the record straight on the council's current budget position and says hard work is continuing to ensure the books continue to balance.

Councillor Spencer, who is Cabinet Member for Corporate Services and Budget, said he was ‘extremely disappointed’ by recent news coverage suggesting that the authority was 'edging towards effective bankruptcy' which he said was based on a misunderstanding of the council’s current financial position.

A report which was discussed by Cabinet earlier this month revealed the financial position for the month up to the end of September, referred to as quarter 2.

This showed that they were forecast to overspend  £741 million revenue budget for 2024-2025 by just over £28 million, increasing from the £20 million forecast overspend in the first quarter of the year.

Continuing demand and cost pressures in adults and children’s social care services are resulting in the forecast expenditure and the rise since quarter 1. However, the rise over the past 3 months is mainly due to additional forecast expenditure on placements in children’s social care, expenditure on special educational needs (SEN) and home to school transport which is increasing as a result of continued growth in numbers of education health and care plans (EHCPs).

The report which was discussed by Cabinet on 5 December 2024 explains that measures are being put in place to tackle the overspend which include:

• vacancy management including pausing recruitment where appropriate
• vacant posts which will be reviewed and frozen or deleted from employee establishments where appropriate
• reviewing the use of agency workers to reduce costs
• reducing expenditure on procurement to only spend money on essential areas

The report also details that a savings plan put in place at the beginning of the year with a target of £31.3 million is 95% on track to deliver a forecast total of £30.3 million by 31 March 2025.

Departments have been told that the 5% of savings that are not currently on track must be found from elsewhere to ensure the total savings delivery target of £31.3 million for 2024-2025 is met.

The general reserve currently stands at £35.4 million and as it cannot fall below the safe level of £25 million, it will be protected by Earmarked Reserves set aside specifically for budget management, if necessary. It will not be allowed to fall below this.

Councillor Spencer said: “We acknowledge that these are still incredibly challenging times for not only our council but authorities across the country but we are working hard every day to ensure we can balance our books and continue to provide services that our most vulnerable rely on.

“We are not shying away from this and are facing it head on, but misleading headlines undermine the hard work currently taking place, as well as being demoralising and unhelpful. It is simply not the case that this council is edging towards effective bankruptcy.

“We are not having to find millions of pounds of extra savings to balance our books for 2024-2025 and we have a solid and effective plan which has been in place since January which is proving effective thanks to the hard work of everyone at this authority.

“We are looking across our services to assess why some cost more to run than in neighbouring authorities and are assessing our whole operating model to bring us into line with others and ensure we are working as effectively and efficiently as possible.

“No stone is being left unturned and it is extremely frustrating to read headlines about bankruptcy which quote figures that are simply wrong, including a suggestion that we are £60 million adrift in the current year. These misunderstandings paint a very misleading picture about where we are and I am very keen to set the record straight.”